The market for SEPs Evidence from European data. Yann Ménière (MINES ParisTech) Tim Pohlmann (MINES ParisTech, TU Berlin)

Transcription

1 The market for SEPs Evidence from European data Yann Ménière (MINES ParisTech) Tim Pohlmann (MINES ParisTech, TU Berlin)

2 Introduc8on Standard essen?al patents cover standard specifica?ons Fast growing number in ICT (Simcoe, 2005) As such, SEPs are different from ordinary patents Value proceeds from standard adop?on?mely declara?on + FRAND licensing Underlying technology is public informa?on Recent but serious anecdotal evidence of SEPs trading ac?vi?es Nortel, Motorola, NPEs US in the spotlight

3 Ques8ons What about SEP trading in Europe? Volume, trend Mo?ves for trading SEPs? 1. Prevent holdup and royalty stacking (Shapiro, 2001) Pooling : should work only when SEP concentra?on is limited Landscape cleaning by large SEPs owners 2. Quick IP mone?za?on for large SEP holders Opportunity for outsiders: new entrants, NPEs They build stronger IP posi?ons for (cross- )licensing Timing of SEPs transfers: an open market? SSO par?cipants have an informa?on advantage Standard release and SEP declara?ons reduce informa?on asymmetries

4 Outline 1. Data sources 2. Measuring the market for SEPs 3. Impact on standards 4. SEP declara?ons

5 Data sources Reassignments at EPO and INPI from 1997 to 2009 EPO: EP applica?ons + 9 months ader grant INPI: Na?onal route + other granted EP patents validated in France SEP declara?ons from 5 major SSOs ETSI, JTC1, ITUT, IEEE, ISO PERINORM database of technical standard specifica?ons On- going extension: EPO and INPI reassignments in New ETSI database of SEPs declara?ons

6 Data (cont ) SEP declara?ons are strategic Reassignments may not be systema?c, and cover different opera?ons Bare transfers, M&A, intra- group transfers, change of name Main steps: Match declara?ons & reassignments: DocDB + Patstat Name harmoniza?on and consolida?on Check transac?ons => keep «bare» patent sales and acquisi?ons Check consistency with SEPs declara?ons Few observa?ons at this stage 341 patents; 617 patent- standard pairs

7 MEASURING THE MARKET FOR SEPS

8 Sales of European patents in the Telecom industry ,410 bare sales of (high quality) patents over the period. A real take- off ader 2004.

9 180 The case of standard essen8al patents (ETSI, ISO, ITUT, IEEE, JTC1) Bare Acquisi?on Also suggests a take off in the last 4 years.

10 Distribu8on of transac8on size ( ) About 50 transac?ons over the period Both small and large bundles The two largest transac?ons took place in 2009

11 Year The case of ETSI declara8ons ( ) Decl. pat. / year Applicant New assignee Families Declared patents INDIVIDUAL FRANCE TELECOM UNIVERSITY FRANCE TELECOM UNIVERSITY SAMSUNG MOTOROLA POEM TECHN OKI CANON ATT IPM BLACKBERRY MOTOROLA POEM TECHN. 1 1 NOKIA SPYDER NAVIGATIONS 1 2 NOKIA QUALCOMM IPWIRELESS NORTHROP GRUMMAN 1 2 SWISSCOM MOBILE RAIDAX TECHNOLOGY 1 1 NOKIA EASTMAN KODAK 4 12 ALCATEL LUCENT QUALCOMM 1 2 NORTEL NETWORKS APPLE 1 8 IPWIRELESS WIRELESS TECH SOLUTIONS 2 3 MOTOROLA BLACKBERRY 1 10 NOKIA MOSAID NOKIA MOTOROLA 1 3 ALCATEL LUCENT INTELLECTUAL VENTURES 1 3

12 Year The case of ETSI declara8ons ( ) Decl. pat. / year Applicant New assignee Families Declared patents INDIVIDUAL FRANCE TELECOM UNIVERSITY FRANCE TELECOM UNIVERSITY SAMSUNG MOTOROLA POEM TECHN OKI CANON ATT IPM BLACKBERRY MOTOROLA POEM TECHN. 1 1 NOKIA SPYDER NAVIGATIONS 1 2 NOKIA QUALCOMM IPWIRELESS NORTHROP GRUMMAN 1 2 SWISSCOM MOBILE RAIDAX TECHNOLOGY 1 1 NOKIA EASTMAN KODAK 4 12 ALCATEL LUCENT QUALCOMM 1 2 NORTEL NETWORKS APPLE 1 8 IPWIRELESS WIRELESS TECH SOLUTIONS 2 3 MOTOROLA BLACKBERRY 1 10 NOKIA MOSAID NOKIA MOTOROLA 1 3 ALCATEL LUCENT INTELLECTUAL VENTURES 1 3

13 Year The case of ETSI declara8ons ( ) Decl. pat. / year Applicant New assignee Families Declared patents INDIVIDUAL FRANCE TELECOM UNIVERSITY FRANCE TELECOM UNIVERSITY SAMSUNG MOTOROLA POEM TECHN OKI CANON ATT IPM BLACKBERRY MOTOROLA POEM TECHN. 1 1 NOKIA SPYDER NAVIGATIONS 1 2 NOKIA QUALCOMM IPWIRELESS NORTHROP GRUMMAN 1 2 SWISSCOM MOBILE RAIDAX TECHNOLOGY 1 1 NOKIA EASTMAN KODAK 4 12 ALCATEL LUCENT QUALCOMM 1 2 NORTEL NETWORKS APPLE 1 8 IPWIRELESS WIRELESS TECH SOLUTIONS 2 3 MOTOROLA BLACKBERRY 1 10 NOKIA MOSAID NOKIA MOTOROLA 1 3 ALCATEL LUCENT INTELLECTUAL VENTURES 1 3

14 IMPACT ON STANDARDS

15 SEP transfers by SSOs ( ) SSO Transferred patents Share of all declared SEPs Standards s.t. SEP transfers Share of all standards ETSI 261 3% 78 16% JTC1 48 7% 7 12% IEEE 17 1% 4 5% ITUT 13 2% 9 4% ISO 2 2% 1 3% Transfers concern a small frac?on of all declared SEPs, Yet more than 10% of standards at ETSI and JTC1.

16 Impact of SEP distribu8on A minor effect on SEP fragmenta?on for large standards Real impact only on standards with less than 60 declared SEPs

17 Impact on SEP fragmenta8on at the standard level HHI#before#SEPs#transfers# HHI#a%er#SEPs#transfers# Most (80%) transfers increase concentra?on. Perfect pooling for some small standards (Qualcomm/Nokia)

18 ROLE OF DECLARATIONS

19 Timing of SEP transfers ( ) Most transfers take place ader standard release. Declara?ons take place before transfer at ETSI only.

20 Who buys before/azer declara8on? ( ) Insiders : 102 firms that declared other SEPs on the same standard Outsiders : 15 firms that declared no other SEPs Likelihood that declara?on follows sale (Probit) 335 obs. Coefficient Standard Error Insider.93181*** ETSI *** Cons Outsiders mostly target declared patents. Insiders also buy undeclared patents.

21 The case of ETSI declara8ons ( ) Year Applicant New assignee Nb families 1997 INDIVIDUAL FRANCE TELECOM UNIVERSITY FRANCE TELECOM UNIVERSITY SAMSUNG MOTOROLA POEM TECHN OKI CANON ATT IPM BLACKBERRY MOTOROLA POEM TECHN. 1 NOKIA SPYDER NAVIGATIONS 1 NOKIA QUALCOMM 35 IPWIRELESS NORTHROP GRUMMAN 1 SWISSCOM MOBILE RAIDAX TECHNOLOGY 1 NOKIA EASTMAN KODAK 4 ALCATEL LUCENT QUALCOMM 1 NORTEL NETWORKS APPLE 1 IPWIRELESS WIRELESS TECH SOLUTIONS 2 MOTOROLA BLACKBERRY 1 NOKIA MOSAID 40 NOKIA MOTOROLA 1 ALCATEL LUCENT INTELLECTUAL VENTURES 1

22 Conclusion A take off SEPs trade in Europe in the late 2000s More transac?ons, some of which very large Different trade paterns seem to coexist Patent pooling (for small standards) + landscape cleaning Acquisi?ons by outsiders (later entrants, NPEs) Informa?on maters Standard release is a prerequisite Declara?ons facilitate access to SEPs for outsiders Work in progress

23 Thank you